Tapering will begin in September with QE ending in December. Focus remains on the central bank's plans to withdraw from their Quantitative Easing program. The Euro retreated off the back of yesterdays Fed rate hike as attention turned to today’s ECB statement. Crude oil has supported the petrol currency with a 0.63% spike in WTI crude oil prices following the weekly inventories report that showed a higher than expected draw in US stockpiles. The Canadian dollar has seen some significant volatility overnight, but well entrenched in the range of 1.2945 – 1.3035. Freeland also added, “We all know we will be strongest with America in our ranks.”
What Freeland did do was emphasize the importance of international order and that Europe, Asia, Africa and the Americas stand together with Canada. Freeland was very diplomatic in her address hardly mentioning trade and rifts between Trump and Trudeau. This could lead to uncertainty being brought back into markets and investors may look to take a risk-averse approach to investment which could see safe-haven currencies rally towards the weeks close.Ĭanada’s Foreign Minister Chrystia Freeland spoke yesterday after receiving a Diplomat of the Year award from Foreign Policy Magazine. Trump is due to release his final plans for tariffs on Friday with the primary resistance likely to come from China. In other news, we will see “Trade War” discussions move back into focus as the week draws to a close. The Fed also revealed they are not overly concerned with inflationary pressures to the US economy as they state they are content with having inflation remain over the 2% target until 2020. Markets will now expect a further two rate hikes in 2018 and three more in 2019 with the probability of a September hike now sitting just above 80%. The US economy has remained healthy which has led to the central bank shifting to a more hawkish outlook and moving away from their crisis-era guidance. Focus yesterday was centered firmly on the US as the Fed raised interest rates to 2% which saw the USD rally across the board.
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